What do statisticians, one of the world’s largest car companies and the NSW Police have in common?

They all, in varying ways, have managed to create for themselves the most difficult environment for ongoing stakeholder engagement. One of little to no trust.

The 2016 Census

The Australian Bureau of Statistics is so comprehensive a failure that a War & Peace sized tome could be required to detail just how many mistakes were piled upon mistakes. However, at the core of the debacle was the arrogant belief that ‘of course everyone trusts us’ and ‘our systems are inviolate.’ Wrong on both counts. Trying to sneak a change of privacy rules on the public with a press release and expecting no pushback is just naive. In an environment of increased awareness of online data privacy it really is adhering to Jeremy Clarkson’s famously sarcastic protestation of “what could possibly go wrong?”

Then to try justifying the privacy rule change by claiming the people provide more information on social media platforms forgets the basic difference that, if they do so, people share that information by choice, not by stealthily enacted bureaucratic fiat.

The arrogance that led to the Census site crash and the confusion of message after the almost inevitable calamity occurred (that some may say they almost goaded hackers into delivering) was the sort of slow-motion train wreck of failed communication that was as predictable as it was cringe-worthy.

VW and Motoring Media

Speaking of arrogance: Volkswagen. The diesel emissions cheating scandal has been running for over 12 months. Still VW seems either unwilling or incapable of finding a way to engage sensibly with its most important stakeholders in any effort to rebuild its shattered reputation.

The latest stroke of PR genius was an official statement from VW Australia refusing to participate in the now well established Australia’s Best Cars awards run by the journalists of the combined state-based Auto Clubs, under the AAA umbrella. A nation-wide group of clubs that represent over 7 million Australian members. Really?

Here is what they said under the name of their local MD, (I’m not making this up).

“The AAA’s public statements inspire little confidence in its grasp of fundamental issues,” Mr Bartsch said. “Moreover, the AAA has become hostile not only to our brands, but to the motor vehicle industry that employs tens of thousands of Australians.”

It is bizarre that this petulant and arrogant tit-for-tat is seen by VW as a valid corporate response to the AAA’ disqualification of VW group vehicles form the 2015 awards, just as the diesel-gate scandal was at its high-point.

Never mind that if only 10% of the AAA members read resulting negative commentary in the Club’s various monthly journals that is another 700,000 consumers who have ‘opinion leaders’ telling them VW is a poor corporate citizen.

NSW Police and the Lindt Siege Inquest

If there is one organization that relies on public trust almost more than any other, it is the Police. We see what happens when that trust is shattered. The USA appears trapped in an endless cycle of mutual distrust and aggression between their Police forces and the black population.

The NSW Police, for some reason, appear to expect, if not demand, public trust without wishing to be too publically accountable. They spent a good part of 2015 engaged in ugly internal power struggles, played out very publicly in the Parliamentary Enquiry into Internal Affairs bugging of, now senior, police back in the late 1990s.

Now they top that mess with uncoordinated and frankly concerning statements about the chain of command (or lack of) in relation to the Lind Siege and the resulting loss of two civilian lives.

The public could be forgiven for asking ‘who is running this s*#t-show’?

Once again there has been no obvious concern for how the sight of senior leadership ducking for cover will play with their key stakeholders and what long-term reputational damage is being done. Perhaps that is a side effect of lengthy tenure and comfortable retirement provisions?

All three examples have not only damaged the reputation of the organisations involved but also created a stakeholder trust deficit that will be very hard to correct.

The first step in regaining any degree of trust is an understanding that there must be an acknowledgment of fault, together with a recognition that a great deal of hard work will need to done to earn that trust back. So far all three show no real sign of that basic understanding.

For now, at least, they serve the purpose of offering clear examples of how not to manage stakeholder relations. However, the really concerning trend is that, even with all that we now know about effective stakeholder management, such monumental mistakes just keep happening.

Within one minute of a Boeing 777 crash-landing at San Francisco International Airport in 2013, it was on Twitter with a photo from an eye-witness observer. Within 30 minutes the number had risen to more than 44,000 tweets with photos and videos taken by survivors.

The wave of social media coverage illustrated three phenomena which have vastly complicated the challenge facing communication professionals in the aftermath of an incident.

Firstly, the sheer number of people actively using social media platforms each month is now passed the two billion mark; potential “citizen journalists” or 28% of the world’s population.

The second is mobility: more than half of all internet access globally is via mobile devices, such as smart phones, tablets, and notebook computers.

Thirdly, the impetus to interact more with communities (stakeholders) through social media directly derives from dissatisfaction with traditional media.

More than half the planet now owns a mobile phone, with unique users now exceeding 3.6 billion. Globally active mobile subscriptions now exceed 7.1 billion, suggesting that the average phone owner maintains almost 2 active subscriptions.

If an incident occurs in a populated area, or at a highly visible location, eyewitnesses or participants can now capture and share images of the event, upload videos or post comments via their mobile devices before any organisation, or government department concerned may even be fully aware of what has happened.

Once the story breaks on social media, the opportunity to provide factual information and influence the developing narrative is reduced to minutes.

However, social media channels, such as Twitter and Facebook, provide organisations with an equal opportunity to reach the news media and other audiences quickly and to provide constantly updated information in an emergency.

Effectively harnessing the power of social media should be a top priority for all organisations and, therefore be an integral part of any organisation’s plans to respond to an accident or major incident. It goes without saying, that the time to prepare for an accident or serious incident is before it occurs, and these preparations should be exercised on a routine basis.

RMK+Associates has the background, experience and front-line history to help governments and organisations with their crisis management plans and responses to ensure they are fully prepared for, and capable of responding to any incident.

Saying ‘sorry’ for an incident, or issue does not ‘cut-it’ any more with affected stakeholders, or the media. Insincere apologies can make the situation even worse.

Unfortunately, CEOs have fallen into contrite contrition in just using the words, but not fully recognising the importance of the sincerity element of them. They may seek to display remorse, but they have forgotten the power ‘sorry’ possesses for people directly affected by the issue to ‘move on’ and how it can earn forgiveness.

Although saying ‘sorry’ was once the bane of all CEOs in a crisis because the legal departments would not allow it to be said for fear of admitting guilt, it now rolls off the tongue of executives whenever they feel it important to put pride aside and acknowledge a mistake.

They do it with such ease and repetition that they have forgotten two important tenants of communication –

messages must address the affected stakeholders, not the broad community, and

any lack of sincerity will result in the affected stakeholders feeling even more insulted, or harmed than before the artificial apology.

CEOs of the Commonwealth Bank, VW, Mitsubishi, 7/11 stores, health care organisations have all apologised for being ‘caught out’ by issues in recent times for which their organisation was responsible. They fumble with words such as ‘values’, ‘ethics’, ‘principles’ – all used to take the high moral ground and deflect blame to others down the ranks.

In most cases, they are following the ‘tried and true’ formula of crisis management – demonstrate ‘action’ after the ‘apology’ and follow it up with ‘taking responsibility’.

They use it to (a) get the media off their backs (because it gives the media the grab: “I’m sorry”) and (b) to get the staff of the organisation to ‘ensure that the issue does not happen again’.

It is called the ‘clear-up’ principle!

The formula is:

Statement of regret – “I’m sorry that this issue has occurred.

Statement of action – “We shall do everything to ensure that it does not happen again.”

Statement of responsibility – “We shall take responsibility for rectifying with the issue.”

When using this formula if you don’t understand your stakeholders and their influence, you are wasting your time with general apologetic words. They become meaningless, especially in today’s age of ‘self’.

The affected stakeholders are caught in cognitive dissonance – the disconnect between what is actually true and what they believe to be true.

This causes frustration which can, in turn, manifest in not only disappointment, but also anger by those who feel cheated of the expected apology.

This is best illustrated by the article entitled Apologies and Settlement in Court Review (Volume 45, Robbennolt) which found that statements of fault acceptance had more impact than apologies that simply stated sympathy without responsibility.

Therefore, to address this disconnect the secrets for saying “sorry” today are:

Be genuinely empathetic about your stakeholders’ situation

‘Tune in’ to your affected stakeholders; know exactly who and how they are being adversely affected and ensure your apology is directed at that situation

Demonstrate that you care about them by empathising with their plight; it is good for your relationship

Convey empathy with a genuine tone and pause after delivering your apology so it does not feel like a ‘brush off’

Take more responsibility than necessary, especially in an ambiguous situation

Avoid the superfluous ‘sorry’

RMKA has many years of experience in crisis and issues management around the world and the need to show the effectiveness of a sincere apology. It can provide you with the ability and supporting communication plans to not only say: “I can see you were harmed by our actions and that matters to me”, but also to understand the impact of this statement on your stakeholders and its acceptance by them.

Helping your organisation develop a values based culture, how Bushido shows the way

Open a paper, turn on a TV, or click something that’s not bait and you will not have to turn far, wait long, or search hard to find a story about bad corporate behaviour. This is no better illustrated than by the recent Mossack Fonseca (Panama Papers) and Unaoil revelations (ably supported by a cast of local stories such as 7/Eleven, CommInsure, Wilson Security et al).

So, is the surfacing of these revelations a deterioration in corporate culture and associated decline in ethical standards, or has this always been the way in which the spinning of the globe has been oiled and there has just been a rise in investigative reporting that has brought these issues out into the open?

The answer is likely a mix of the two, however the naïve optimist in me would like to think that a fall in the standard of behaviour accounts for the majority of the stories that have been broken; as opposed to the alternative of low-standards having always existed out of view.

Progressing on that basis, the question arises how do organisations ensure that their much vaunted corporate values are adhered to in the pursuit of shareholder value and returns? As we know, dollars (or perhaps what they represent) are very powerful things.

Societal values are evolutionary in nature; by way of example I cite our acceptance of violence. It wasn’t so long ago that a punch up at the pub, though not encouraged, was accepted as a form of dispute resolution. Rightly, this is no longer the case.

I therefore contend that organisations (be they government, corporate, or not-for-profit) need to have an adaptive system in place that educates their operational headcount about what is, and is not behaviourally acceptable. A one-off, tick box exercise to satisfy a checklist would not be sufficient given that the subject matter is undergoing continual metamorphoses.

An enlightening parallel can be found in Bushido: The Soul of Japan, an explanation, if you will, written by Inazo Nitobe[1] of the moral principles that Samurai were required or instructed to observe.

The nature of the system was such that it was not a written code; rather it was a set of principles that were handed down organically (not unlike an oral history) either via word of mouth, or more impressively through deed.

Interestingly, the paid fighter was naturally recruited from some fairly rough and ready personnel, it was through the generational application of the ‘unwritten moral code’ that Samurai came to be highly respected and seen as both the exemplars and guardians of the highest behavioural standards.

It was a sorting of the wheat and chaff that conveyed enormous privilege and responsibility upon those within its ranks.

It is possible to make the argument that our leaders are those now charged with passing down through word and deed the standards that are expected of their charges. These standards must be the living representation of ‘Value Statements’ and take into account the evolving expectations of society at large.

As outlined by my colleagues Rob Masters (Contrite Contrition) and John Kananghinis (The Values Deficit) in this edition of Words and Insights society at large has had enough of hearing mealy mouthed platitudes laid at the foot of the most recent scandal. They want to see leaders who own the situation and the moment; leaders who embody their values statements through their actions; thereby laying the foundations and paving the way for the next generation of Samurai to follow them, and protect society’s behavioural standards.

[1] Inazo Nitobe (1862-1933) was born in Morioka, Iwate prefecture. After graduating from Sapporo Agricultural School, he went to the United States and Germany, where he studied agriculture and economics. On his return to Japan, he held various positions in education. From 1920 to 1926 he stayed in Geneva as Under-Secretary General of the League of Nations. After retiring from that post, he dedicated his life to peace. In 1933 he died in Banff, Canada.

https://www.rmka.com.au/wp-content/uploads/2016/04/Japanese-Character-For-Respect_883x331.jpg331883Angus Nichollshttps://www.rmka.com.au/wp-content/uploads/2015/08/logo-300x132.pngAngus Nicholls2016-04-29 12:49:182016-05-24 14:42:46Would you like decency with that?